£120k in Cash ISAs - thinking of moving to S&S ISA

Eyeful

I agree with you there different types and scale of risks.
I cannot recall on this, site of anyone reporting a bond scam, where the rate was below that on the FTSE 100. From memory the "hook rate" has been higher.

eskbanker

Eyeful said:

I agree with you there different types and scale of risks.
I cannot recall on this, site of anyone reporting a bond scam, where the rate was below that on the FTSE 100. From memory the "hook rate" has been higher.

Bond scam rates are typically positioned against cash-based products and presented as 'interest' rather than drawing attention to the risks, so there'd be no reason to compare with "that on the FTSE 100", although the average yield on the FTSE100 isn't a particularly well-publicised figure anyway.

However, this is all completely moot anyway in the context of this thread - as well as being familiar with the concepts of investing, OP has also made it clear that they're looking to do so within the confines of a S&S ISA, which is highly unlikely to offer any of the dodgy scams that you seem to be so concerned about....

dunstonh

I consider the FTSE 100 to be an average investment risk. 

In isolation, it is high risk as its 100% UK large cap.  So, hardly any diversification.  It is also 100% equities. So, not even close to average risk (which would see volailtity around 60% equity ballpark).  If you took a typical 1-10 scale where 1 = cash and 10 = highest conventional risk then FTSE100 would come in at 9.

eskbanker

dunstonh said:

I consider the FTSE 100 to be an average investment risk. 

In isolation, it is high risk as its 100% UK large cap.  So, hardly any diversification.  It is also 100% equities. So, not even close to average risk (which would see volailtity around 60% equity ballpark).  If you took a typical 1-10 scale where 1 = cash and 10 = highest conventional risk then FTSE100 would come in at 9.

Ah, but where does FTSE100 sit on a scale where 1 = cash and 10 = juggling chainsaws when blindfolded?

andy1100xx

Thanks all for the input - it's obvious from the conversation that the concept of risk is a bit open for interpretation.

Taking risk out of the equation for a moment,  I'm just looking for something in a tax-free wrapper that will give say, up to an anticipated 2% - 3% annual net return over a minimum of 5 years with minimal input. If I can get some suggestions on possible routes to obtain this (e.g. platforms/funds) then I guess I can look at the related risk of these and determine if I've got the appetite for the level of risk it would require. 

eskbanker

You mentioned earlier that you have "some long-standing, medium risk investments", so how did you go about selecting these?

Once past the usual comments about risk, loss potential, having savings, pensions, etc, the standard go-to answer for those looking to invest without much knowledge is to go for one of the low-cost global multi-asset funds that offers wide diversification across a range of risk profiles.  https://monevator.com/passive-fund-of-funds-the-rivals/ offers an analysis of the main players (as they were a couple of years ago, anyway), which can all be readily obtained via any of the mainstream platforms.

andy1100xx

The thanks for the link, that looks like a great place to start. 

I’ve had the long term medium risk funds for around 12 years now, I took them out to use up some spare funds not being put into my pension which I was maxing out at the time. The funds were chosen with my FA at the time to provide a balance against the pension. 

eskbanker

andy1100xx said:

The thanks for the link, that looks like a great place to start. 

I’ve had the long term medium risk funds for around 12 years now, I took them out to use up some spare funds not being put into my pension which I was maxing out at the time. The funds were chosen with my FA at the time to provide a balance against the pension. 

In which case, one other comment - it's best not to take a fragmented view of your investments and consider them in isolation from each other, but look at them more holistically, in terms of what you're invested in at an aggregate level.  If your existing funds have a particular slant to complement the allocation of those in your pension, then continuing with the same approach would be worthwhile, to ensure that your investments collectively fit your desired risk/sector allocation....

Albermarle

p to an anticipated 2% - 3% annual net return over a minimum of 5 years with minimal input. If
Although inflation is low at the moment, when calculating future real investment returns , most people use a figure of 2%.. to 2.5%.
So the above desired returns would only keep you approx up with inflation. If you want 2% to 3 % real growth , then the investments need to make more like 5%.
In fact it is always better to think about investment returns after inflation , as this is a more accurate way.

andy1100xx

Albermarle said:

p to an anticipated 2% - 3% annual net return over a minimum of 5 years with minimal input. If
Although inflation is low at the moment, when calculating future real investment returns , most people use a figure of 2%.. to 2.5%.
So the above desired returns would only keep you approx up with inflation. If you want 2% to 3 % real growth , then the investments need to make more like 5%.
In fact it is always better to think about investment returns after inflation , as this is a more accurate way.

That's my issue - with the current bank interest rates being so low they are effectively eroding the real value of the investment as they are not keeping up with inflation. I'm looking at 2-3% to at least keep up with inflation and possibly better it slightly. 5% would obviously be better but then it comes with the related risk.